Karl Polanyi: A Life on the Left

B orn of liberal minded Jewish parents of the upper classes, I was brought up in an intense, if vague, religiosity. So begins a short autobiographical digest that Karl Polanyi sent to a Christian organization aiding refugees from fascism in the 1930s. My mother was Russian, my father Hungarian, but of German culture and western education. I feel deeply indebted to his passionate idealism for the ethical impulse he tried to pass on to our lives. Until 1919, when I left Hungary for ever, I never thought of myself in any other way than as a Hungarian. ¹ These lines are revealing. They beg questions too, which are explored in this chapter. It will look in turn at Polanyi’s family life, his parents’ social status and religion, the Jewish Question, and his relationships to religion and nation.

Karl’s father, Mihály Pollacsek, came from a commercial and landowning family in the foothills of the Carpathians.² He lived for a time in Vienna, where three of his children, Adolf, Laura, and Karl, were born. A contractor and engineer, he bid for contracts to build sections of railway, including tunnels in Galicia and elsewhere in the Austro-Hungarian empire.³ His fortune enabled him to keep an apartment in Vienna, even after he had moved his family, in the early 1890s, into a spacious apartment on Budapest’s Andrassy út. Still today the most expensive residential street in the city, the Andrassy was a broad avenue modeled on Paris’s boulevards, with recherché arcades, cafés, and a department store. While its first residents, in the previous decade, hailed predominantly from the artisanal middle classes, if with a substantial minority from the haute bourgeoisie and intelligentsia, by the 1890s its prestige had risen, and aristocrats and plutocrats were moving in.⁴ The Pollacseks’ immediate neighbors included a grosskapitalist, a doctor, a factory owner, and a retired captain of the Hussars.⁵ Other Andrassy residents included friends of the Pollacsek family, such as Georg Lukacs (father: banker) and Arthur Koestler (father: businessman).⁶

In a land of savage poverty the Polanyi children—Laura, Adolf, Karl, Sophie, and Michael—were raised in luxury, and it is safe to suppose that Karl’s lifelong dedication to the socialist cause was informed by an early awareness of iniquitous social division. In a country with a literacy rate of only 40–50 percent, they received the best education that money could buy, modeled on that of John Stuart Mill.⁷ They received private tuition until the age of eleven, with emphases on classics and world literature, as well as the acquisition of languages. Mihály, who utterly adored his son and was tremendously impressed by his emotional intelligence and academic prowess, described the eleven-year-old Karl as unusually, indeed preternaturally gifted and able to effortlessly master the most difficult philosophical questions.⁸

At eleven, Polanyi began to attend the Minta Gymnasium, thanks in part to a scholarship from the Jewish community.⁹ The Minta was one of the finest high schools in the city. Its alumni included the likes of Edward Teller, Nicholas Kaldor, and Thomas Szasz; its teaching staff included distinguished members of the intelligentsia, and it has been styled by a writer for the London Observer as a nursery for the elite comparable with such schools as Eton (for Conservative M.P.s) and Le Rosey (for ex-monarchs and socialites).¹⁰ It was, however, a democratic and forward-thinking institution. In its corridors, Theodore von Kármán recalls, the teachers moved constantly among the pupils, the two groups were permitted to talk outside class time and about nonschool matters, and its charter declared for the first time in Hungary that a teacher might go so far as to shake hands with a pupil in the event of their meeting outside class.¹¹

Polanyi applied himself industriously to his academic tasks, in which he excelled, and there is some evidence that he performed well in physical exercise too. (In a letter to his mother he boasts that he won more power points than any of his classmates and complains of the muscle pains that resulted.¹²) He threw himself into a plethora of pursuits, including a Socialist Students group, as well as dancing, rowing, fencing, and chess (to which he grew so addicted that, later in life, he felt compelled to give it up).¹³ With the demands of school and extracurricular activities, as well as work—for following his father’s bankruptcy he took up private tutoring to help out with the family budget—his teenage years were busy, and it was often past midnight before he retired to bed.¹⁴

When Mihály’s firm went under, the family was obliged to move house. They found a fourth-floor apartment in the nearby Ferenciektere: less sumptuous, less spacious, and a step down from the top of the social pyramid, yet still a fine address—a plaza with more than its share of imposing buildings, including the Klotild Palaces and the library of the Royal Hungarian University.¹⁵ Five years later, in January 1905, Mihály drew his last breath. My poor, poor children were his parting words.¹⁶ This was the most cataclysmic moment that Polanyi was ever to experience. Until his marriage seventeen years later, he wrote his brother Michael, their father’s memory remained the strongest force in my life.¹⁷ He had never loved anyone as much as Mihály, and admired in particular his warm, virile and noble personality, moral probity, and the pure, unadulterated idealism of the Western brand.¹⁸ Throughout his life, he experienced recurring dreams that Mihály had come back to life, and on the anniversary of his death, he would send a commemorative letter or card to one or more of his siblings (and, later, his daughter).¹⁹ The little that was good in me, he confided not long before his own death, was the gift of my father to my life.²⁰

Karl’s mother, Cecile Wohl, came from Vilnius, at the time a center of Jewish learning. Her father had been a rabbinic scholar who had translated the Talmud into Russian but took to exploring the similarities between the Jewish and Christian faiths—an inquiry that did not endear him to conservative sections of his community. Cecile’s own free-thinking streak came to the fore at an early age, which prompted her father, suspicious of her associations with narodnik students, to dispatch her to Vienna to stay with Anna Lvova and her husband Samuel Klatschko.²¹ There are grounds to be sceptical of descriptions of the young Cecile as possessing a rebellious spirit.²² But if they are accurate, her father was dousing the flames with petrol, for Klatschko was a populist-inclined socialist in whose home Russian revolutionaries would habitually overnight during sojourns in Austria. Karl, too, would stay there during his frequent visits to the imperial capital, and, with his family, would spend summer vacations with the Klatschkos in a resort in Lower Austria.

The Klatschkos nourished Karl’s fascination with Russia, in particular in narodism and literature. The Russian intelligentsia, Georgi Derluguian has observed, perceived itself as the critical and guiding force of epochal renovation; it inclined to voluntarist political strategies, whether charitable activism or pitching bombs at counts and emperors, and was as if born to bring forth a world-class literature full of tempestuous emotions.²³ Russia exerted an irresistible pull on Polanyi’s imagination. It was a land of profound originality, its aspirations expressed by poets, novelists, and philosophers of unrivalled force and profundity.²⁴ If he never quite fully became a Fabian, this was due essentially to his Russian influences. Consider by way of comparison the biography of the Fabian leader, Beatrice Webb. Like him, she was the child of a railway-building businessman; like him, she was steeped in classical liberal thought when young (notably the positivist sociology of Herbert Spencer) before turning sharply against mainstream liberalism, vigorously supporting welfare reform, and becoming an apologist for Stalin’s regime in Russia. To her, however, Tolstoy and Dostoevsky were classic authors, while to Polanyi’s imagination they leapt out as "elements of the Russian revolution!."²⁵

The words Karl chooses to describe his mother are infinite fascination and overwhelming personality.²⁶ She was a colorful woman—not so much in outward appearance (she tended to dress casually, the opposite of a fashion model²⁷) but in her avant-garde spirit and public persona. An early follower of Émile Jacques-Dalcroze, she established an Academy of Eurhythmics in Budapest (Dalcroze Foiskolaja) that taught the representation of musical rhythm through bodily movement.²⁸ A pioneering feminist, she set up a private women’s college in 1912, which she envisaged as an open university for Hungarian women.²⁹ (It is presumably with reference to this that the apparently sceptical Karl advised her that young women should not be taught by young chaps.³⁰) She was a devoted follower of contemporary cultural life and letters, with a nose for the zeitgeist, and hosted a highly successful salon. In this respect she epitomized the middle-class Jew for whom assimilation was about becoming salonfähig (culturally respectable) and zeitgemäss (up-to-date). At her salon, in the recollection of her friend Oscar Jaszi, the mistress of the house, sparkling and witty would perform aerial somersaults among various ideologies, and would excel at discovering and showcasing new talents, whom she would tame to her taste.³¹ She wrote for liberal German periodicals in Budapest and Berlin³² and penned unpublished texts on a miscellany of cultural and political topics, from graphology to jewellery, pedagogy to pyjamas, romance to the Russian revolution.³³ Her letters overflow with references to poets (Schiller, Burns, Heine, etc.), artists and aesthetic movements (Cézanne, Picasso, Braque, Léger, Simplicissmus), and social scientists (Friedrich Engels),³⁴ and her description of the ecstasy she experienced when reading Nietzsche and Spencer is entirely in character.³⁵ She was interested in psychoanalysis too, in particular in the potential it offers for deciphering works of art. In a letter to Freud, Sandor Ferenczi described her as a very well educated lady who has an excellent grasp of the sense of psychoanalysis.³⁶ She was, in addition, a friend and patient of Alfred Adler, the most politically progressive of its three founding fathers.³⁷

Karl did not share Cecile’s enthusiasm for psychoanalysis—it was obfuscatory, even morally dubious³⁸—but had he lain on Adler’s couch he might have divulged feelings toward his parents that were less than oedipal. He truly loved his mother and greatly appreciated her wit, political vim, and intellectual curiosity. But he did not inherit her haute-bohème temperament, and he mistrusted what he saw as her moth-like attraction to bourgeois salon life, fluttering around the light instead of grasping it as a torch.³⁹ His father’s character was calmer and less flamboyant—rather sober and sceptical in his words⁴⁰—and there was not the slightest ambiguity in Karl’s feelings toward him.

Polanyi’s parents supplied him with a heady cocktail of liberal and radical-populist values, contradictory influences that defined his world-view. Like many a continental liberal of the day, Mihály was anglophilic. In contrast to Cecile, Karl describes him as deeply Westernized and the motivating force behind the English upbringing that he and his siblings enjoyed.⁴¹ From him, Karl learned that English connotes gentleman, such that when he complimented Lukacs with Your father sure is an Englishman!, gentleman was understood.⁴² (Karl’s image of the English gentleman in his natural habitat was quaint: He wore a chequered suit; he was called ‘My Lord’; he climbed the Matterhorn and was never seen without a telescope and an umbrella; he stayed at a first class hotel where, it was understood, he had parked his battleship.⁴³) Britain, moreover, was home to a pantheon of the young Polanyi’s inspirations, such as Rudyard Kipling and H. G. Wells, and it had blessed the world with the most idealistic current of liberalism. When a young journalist, Polanyi wrote that it was, back in 1848, British free traders who had mobilised the British liberal bourgeoisie and working class behind the seemingly hopeless Hungarian struggle for independence. This was despite the fact that the 1848 revolutionaries were Listian opponents of free trade, a rider that emphasized in Polanyi’s mind the notion that free trade is not simply an economic manifesto but is glorious in the spirit of pacifism and the rights of the peoples. He revered two free traders in particular, the heroic and tough Quakers Richard Cobden and John Bright, as the forbears of socialism in general and of Britain’s Labour Party in particular.⁴⁴

The ingredients that engendered what Polanyi describes as his characteristic tendency to envisage social developments in prophetic terms (as the fate of our civilization) were, he wrote his brother, "the explosive mixture of 100% pure Russian and 100% pure Anglo-Saxon influences in my early life in the presence of the Germanic speculative catalyser of Geistigkeit."⁴⁵ Elsewhere he cites the same geocultural triad in explaining his respect for the value of tolerance: he had acquired it from Goethe, but [also from] Dostoevsky and John Stuart Mill.⁴⁶ Is it a coincidence that this same triangle maps to the conceptual schema that Polanyi developed in later life, of redistributive, market, and reciprocal mechanisms of economic integration? The first of these is a synonym for the Germanic Verwaltungswirtschaft,⁴⁷ the second has historically been identified with Anglo-liberalism, while the third conjures up the Russian peasant commune. Alternatively, if one omits the Germanic apex, the maternal Russia / paternal England dichotomy can be interpreted as the foundation of what one of Polanyi’s friends identifies as his inclination to construct analytical situations that center on antagonisms between binary opposites.⁴⁸ His tendency to draw a sharp line between modern market-directed economies and all other tradition-directed systems is a case in point.⁴⁹

In his theoretical framework, Polanyi inclined to polar contrasts, and to some of his contemporaries he appeared the most radical of radicals—in contrast to his moderately radical brother, Michael.⁵⁰ Yet in his practical recommendations he tended to favor either the reconciliation of opposing parties or a middle path between them. The name of the political organization that he cofounded in 1914, the Radical Bourgeois Party, is symptomatic. Later, in the 1920s, he sought to lash a guild-socialist conception of societal transformation to a liberal advocacy of free markets, envisaging a pure market economy contained within an institutional framework that would conjoin parliamentary democracy in the political sphere with industrial democracy in the economic. In the 1920s he advocated a Third Way in contrast both to Soviet planning and the market liberalism of Ludwig von Mises, and he aligned himself with the Second International in opposition to the liberal international of Geneva and the Comintern of Moscow.⁵¹ In the 1930s he swung close to communism, but principally during its liberal Popular Front phase, and shortly before his death he set up a journal, Co-Existence, that was dedicated to the reconciliation of the West and the Soviet Union. Given the fusion of paternal West and maternal Russia that was so deeply rooted in his psyche, this was a fitting valedictory venture.

A MAGYAR-JEWISH MONGREL

If his contradictory parental influences set up a creative tension that linked the familial and geocultural scales, Polanyi’s relationship to his identities that occupied the intermediate scale—Magyardom and Jewishness—was of a more fractured and volatile kind. To the question, asked by Louis Dumont, whether Polanyi was a Jew by birth, his daughter Kari Polanyi-Levitt replied that "he would most certainly not have wished to be described as a Hungarian Jew, although he would have qualified as a Jew by the Nazi ‘blood’ definition."⁵² Two principal markers of assimilation were the magyarizing of the family name to Polanyi—in Karl’s case, in around 1907—and religious conversion.⁵³ He was registered as a Christian in the early 1920s but had probably converted in 1919, a year that witnessed a mass movement of conversions of Budapest Jews to Christianity, particularly of the upper classes, and which included in its number Michael Polanyi and his friend Leo Szilard.⁵⁴

The environment in which Polanyi grew up in Budapest, Polanyi-Levitt’s letter continues, "was certainly not Jewish. Indeed, my grandfather and my father had an aversion to any contact with the Jewish community, which was considered as a ghetto from which enlightened people should remove themselves to join the mainstream of Hungarian society."⁵⁵ If the gist of these comments is accurate, some details are debatable, notably whether the environment in which Polanyi grew up was not Jewish. A remarkable number of Jews and those of recent Jewish descent inhabited two of his environments: the Galileo Circle (on which more below), and Andrassy Avenue. In the latter case this was a function of class and oppression. Upwardly mobile Jews tended to congregate in Pest, excluded as they were from Buda by the Magyar gentry who considered Pest alien, dirty, Jewish-and-German, money-grubbing, and usurious.⁵⁶ Most of his friend Georg Lukacs’s renowned Sunday Circle came from the ranks of the assimilated Jewish middle and upper classes, including Lukacs himself (née Löwinger), Mannheim, and Béla Balázs (née Herbert Bauer). As to the Galileo Circle, Polanyi was well aware that its composition was disproportionately Jewish; he himself described it as Hungary’s only approximation of an entelechy of Russia’s revolutionary Jewish emancipation.⁵⁷

When, in a letter to his brother of 1959, Polanyi attempts to capture the quintessence of Hungary it is its Jewish-Magyar mix that he emphasizes. Styling himself a British friend of Hungary, he explains that although he never quite belonged to Hungary, its people have his affection.

I remember the depths from which they rose: a Magyar-Jewish mongrel, not deserving to be fully accepted as morally civilized, bearing the stamp of the ethically defective, victims of the backward standards of a church and aristocracy whose heart was elsewhere. A nobility, fitted with false pride but without self-respect, linked to the West by a half-assimilated Jewry, not truly Western and yet hindered in melting into the Magyar stock…. And yet the Magyar stock too had been denaturalized by the hothouse brood of a second-class foreign intelligentsia which pre-digested the valuable Western experiences Hungary required.⁵⁸

What is remarkable in this passage is not only its description—in a knowing echo of Daniel Defoe’s true Englishman—of the Magyar-Jewish mongrel, but that for all its pejorative tone, Polanyi’s avowed aim is to explain why the Hungarians have his affection, and that, alongside sideswipes at the church and nobility, he aims barbs at his own milieu, the hothouse brood.

The Magyar-Jewish mongrel was the product of a particular time and place: the Austro-Hungarian Empire of the nineteenth century. With respect to its sustained period of administrative and constitutional unity, Hungarian liberals liked to compare their nation to Britain. Hungary’s national cohesion and patriotism, claimed Jaszi, Polanyi’s mentor and lifelong friend, is the result of an evolution that is as ancient, natural and logical as that of England.⁵⁹ But if this is a rose-tinted rendition of English history, it bore no connection to Hungary’s. In letters of blood and iron, History was scrawling the message that the highway to modernity proceeds by way of the assimilation of disparate classes and ethnic groups into culturally homogenous nation-states. The old world made up of myriad minorities was giving way to a new regime, in which some achieved recognition as nationals, while others—whose customs, language, or looks prevented them from fitting in—were relegated to minority status. Whereas in Western Europe this process tended to assemble diverse linguistic and cultural peoples into discrete nations, in Central and Eastern Europe successive inward migrations and conquests had established a more complex interlayering of ethnic groups.⁶⁰ In the case of Hungary, the nation’s linguistic heart was rural. Latin-reading clerks, French-speaking aristocrats, and German- and Yiddish-speaking merchants and teachers all assimilated to Magyar, the language of the peasant. Its political nucleus, however, was a reactionary aristocracy, locked in an uncomfortable if sporadically tender embrace with the liberal bourgeoisie, suspicious of their overbearing superiors in Vienna, and pledged to the marginalization and persecution of minorities: Romanians and Serbs, Slovaks and Ukrainians, Roma and Jews. Thus the Hungarian nation coagulated in a peculiarly fractured manner and was subject to ferocious torque as the kaiserlich-und-königliches system disintegrated.

Why was this? It had much to do with what Leon Trotsky referred to as uneven and combined development. In Western Europe, capitalism had evolved relatively gradually, with the mode of production, class relations, nation-state formation, and the emergence of consolidated states developing more or less in parallel. But the formation of a global market dominated by Western businesses and of a world political order controlled by Western states challenged the disparate polities of Eastern Europe to catch up or risk subordination. Eastern civil society was increasingly influenced by processes underway west of the Elbe, even as monarchies and aristocracies continued to hold the reins of political power. More or less reluctantly, they presided over reforms that aimed to strengthen their armies and bureaucracies, attenuate caste privileges, and reduce feudal constraints on trade, but it was a fraught process, one that lacked the cultural preparation and commercial integration that had facilitated nation-state formation in the West.

The twin revolutions—political and economic—of the closing decades of the eighteenth century, centered on France and Britain respectively, elevated and challenged the Jewish populations of Central and Eastern Europe. The former saw the rescinding of religious and occupational restrictions, generating pressure far beyond France’s borders to grant Jews full democratic rights and spurring reform-minded Jews to challenge the authority of orthodox rabbis. This struggle for emancipation took place when the Enlightenment ideal of bildung (rational self-improvement and refinement, especially of the mental faculties) was enjoying its acme, and many Jews took this image of modernity to heart.⁶¹ The latter, the Industrial Revolution, enabled Jewish financiers and traders to integrate into a swiftly expanding and socially fluid urban bourgeoisie. Central Europe’s Jewish communities were peculiarly attuned to the pulse of these momentous transformations. Soaring Western demand benefited the many Jews who were involved in the grain trade—including Polanyi’s paternal grandparents, flour merchants in Austro-Hungary’s northeastern reaches. But even as some were poised to ride the cresting waves of economic demand, others were being flushed out of the traditional economy as manufactured imports flooded their artisanal markets.

The new ideas of nationalism and modernization emanating from the West were picked up quickly by Jews, plugged as they were, through German and the various dialects of Yiddish, into the Germanic cultural sphere. But the Age of Nationalism raised a paradox for Central Europe’s Jewry. On one hand, their national identity had much that it could draw on: a common religion, customs, and language, as well as commercial collaboration and patronage networks. These potentially supplied the sort of cohesion that is indispensable to the development of national consciousness—in Western Europe, networks of merchants had provided one of the vital elements around which embryonic national consciousness crystallized. On the other, Jews lacked that other obligatory component of nation formation: a territorial concentration of culturally connected communities. In its absence Jewish nationalism was, literally, utopian.

The contradictory effects of capitalist development on the Jewish populations of Europe have been perceptively discussed by Abram Leon in The Jewish Question. One tendency was for capitalism to favor the economic assimilation of Judaism and consequently its cultural assimilation. It uprooted millions of Jews, ripping them from their traditional milieux and reassembling them in urban environments where, bereft of the local community that had enveloped their religious identity, many now sought to blend into the dominant culture. Yet the same structural conditions of economic dislocation, migration and urbanization, especially where anti-semitism was rife, could also stimulate Jewish national consciousness. The renaissance of the Jewish nation, the formation of a modern Jewish culture, and Zionism, writes Leon, all accompanied the processes of emigration and the concentration of Jewish masses in the cities and went hand in hand with the rise of modern anti-semitism.⁶² The two tendencies played out quite differently according to place and period. In Western Europe the accent was on assimilation, which itself henceforth came to connote the West: gesellschaft, economic modernization, and political equality. If the Age of Nationalism was confronting all groups—French-speaking nobles, German-speaking merchants, and so on—with the injunction to assimilate, for Jews, being an oppressed group, assimilation required more than a gentle blending into the new cultural landscape but also, crucially, a "purposeful, even programmatic, dissociation from traditional Jewish cultural and national moorings.⁶³ Having achieved this successfully, the Western assimilated Jew came to be stereotyped as the incarnation of modernity: rationalistic and deracinated, bloodlessly cosmopolitan and inauthentic, plastic people lacking an organic culture and custom. In the East, Jewish populations were greater in number and size, with a preponderance of middle and lower social layers, such as artisans, pedlars, hawkers, and vagrants, and more likely to retain the badges of distinction—Yiddish, the caftan, Talmud-centred education—that assimilated Jews rejected.⁶⁴ Over the course of the nineteenth century the stereotype of the Eastern Jew was constructed: rural, poor and uneducated, dirty and loud, clinging to tradition and prone to mysticism; altogether zurückgeblieben (left behind).⁶⁵ The East" came to stand for cultural nationalism—gemeinschaft, religion, and tradition—and for the ghetto, which by century’s end connoted not simply the zones in which many Jews were forced to live but a slumscape of superstition and ossified tribalism.⁶⁶

If any city experienced a confluence of Western and Eastern Jews it was Budapest. Nowhere in Central and Eastern Europe were Jews more assimilated and secular than in the Pest of Polanyi’s childhood. Nearly a quarter of its population, and a much higher proportion of its professional, business, and financial circles, was Jewish.⁶⁷ In the mid-nineteenth century the message conveyed by the liberal establishment was that Jews were progressively to be permitted entry into Hungary’s civil society and political community. At this time, discussion of the Jewish Question revolved around the feasibility of political emancipation and social integration, and the Jew was depicted in the press as a rag collector or a rich shopkeeper: clever and shrewd, and disreputable rather than odious. Welcoming the liberal climate, Jews played their part in forging the new nation. They were vital elements in Hungary’s economic and cultural renaissance, and its capital city was made by Jews, for us, in the words of the (non-Jewish) poet Endre Ady.⁶⁸ In the mid-1890s the Jewish faith was accorded the same privileges as the Christian denominations, and Jewish representatives were accorded seats in the upper house of parliament. The Liberal Party championed emancipation and was rewarded for doing so: half of Budapest’s electorate was Jewish, and Liberal deputies were elected with comfortable majorities.

Throughout Central Europe, Jews, due to their higher levels of literacy and their need for political security, generally associated with, and assimilated to, the dominant nations (Poles, Magyars, and above all Germans), rather than to the peasant, so-called nonhistoric nations (Czechs, Slovaks, and Romanians).⁶⁹ In the Habsburg Empire, the capitalist classes played a central role in sustaining the cohesion of the imperial state, and within them, Hungary’s Jews were prominent. Their alignment was further cemented by the 1867 Compromise, which promoted the Hungarians from the status of subject people to joint governor of the Habsburg prison house of nations; it signified, in Polanyi’s words, the establishment of the hegemony of the German bourgeoisie in Austria, coupled with Magyar domination over Slovaks, Serbs, Croats, Ruthenes, and Roumanians, in the eastern half of the Monarchy.⁷⁰ Following the Compromise, large numbers of Hungarian Jews discarded the Germanic identity in favor of the Hungarian, and many switched their household language from German or Yiddish to Magyar. This contributed to its transformation from a peasant dialect to a medium of high culture and to the accelerated magyarization of Budapest in particular, fully 90 percent of whose inhabitants spoke the national tongue in 1920, up from 46 percent only fifty years earlier.⁷¹ In this way, Hungarian Jews cast off the stigma of being Germans, writes Peter Pulzer, though this did not help them much with the races whom the Magyars were oppressing.⁷² Indeed, in consideration of the Jews’ tendency to favor the historic nation, even conservative Hungarians could enjoy the benefits of Jewish assimilation. Without it, they knew, their nationality would have dwindled to a minority within its own territory.

For the Polanyi children, acculturation was first and foremost in a bourgeois milieu that spoke German—the lingua franca of the Habsburg Empire. Their mother tongue was not Hungarian, a language that Cecile never succeeded in mastering. Yet they did take on a Hungarian identity,⁷³ and one, moreover, that assumed that particular historic nation’s blindness toward its nonhistoric counterparts. As schoolboys, Polanyi recalls, we had no interest in the vicissitudes of the 49 per cent of the population who were of non-Magyar extraction; many of us had not so much as heard of their existence. Actually, their great majority belonged to those underprivileged strata with which middle-class boys had but little contact. It was a chauvinistic outlook, he adds, that made us resent as an insult the assertion that Hungary was not a Magyar country.⁷⁴

Despite their best efforts to learn Hungarian and despite the conversion of some to Christianity, Polanyi and his peers found themselves increasingly excluded from full national membership, as Jew-hatred grew. Political culture in Hungary at the time was dominated by the nobility. It harbored the deprecation of commerce that is characteristic of premodern agrarian elites, with merchants seen as duplicitous and deception assumed to be the necessary basis of all commercial transactions. It fancied itself the steward of authentic Hungarian values: honesty and love of the land. But its station and values were under threat from encroaching capitalism and from the movements of resistance that it was catalyzing. Traits identified with capitalist modernity and its discontents were projected onto the Jew. Assimilated and ghetto Jews alike were stereotyped as profiteering and selfish, materialistic and unethical, cosmopolitan and urban, liberal and socialist.⁷⁵ A wholly rebarbative caricature emerged of the Jew with a devilish grin—speculating, mercenary, and alien⁷⁶—and the Jewish Question was insidiously reworked as a stock concept that conflated discussion of Jews with that of the afflictions of modernization tout court.⁷⁷ Under the guise of this seemingly neutral term, anti-semites accused Jews of taking over the economy, education, the professions, and even agriculture, conjuring up an image of an inundation of rural Jewish immigrants from neighboring states to the East.⁷⁸ The greater the success Jews achieved in the limited zones of economic life and the professions that were open to them, the more vociferously they were identified as a cancerous intruder.

Endemic anti-semitism ensured that the identity of Jews, whether or not they sought to assimilate, remained in the spotlight. However loudly they protested their indifference to their Semitic heritage, anti-semitism remained fiercely interested in them. It possessed a weapon, in the form of a twin-bladed stereotype, that could attack the target from diametrically opposed directions. One attack, more common in the early modern period and, later, toward the Eastern Jew, stereotyped Jews as particularist: they cleave to a traditional way of life, atavistically refusing to dissolve their identity into the warm ocean of modern secular citizenship. But with Jewish emancipation a second image gained ground. Emancipation and industrialization had swept immigrants into the cities, prompting such cultural conservatives as Thomas Carlyle and Oswald Spengler to bewail the impure culture and loss of traditional values that supposedly resulted from ethnic mixing. Jews were now singled out as the eternal outcasts, the rootless cosmopolitans who threatened to corrupt the nation and who mingled suspiciously with other groups that evinced an unhealthy regard for liberalism or radicalism, such as intellectuals, artists, or freemasons.⁷⁹ (One conservative social and scientific periodical, to give a representative example, equated Jews with two other groups to which Polanyi happened to belong, the bourgeois radicals and the freemasons, and described this triad as a parasitical force weakening the body of the nation.⁸⁰) With no true homeland of their own but with cultural and commercial connections to their brethren in other countries, Jews were treated with suspicion, obliged to publicly perform their renunciation of their heritage, and to declare their allegiance to the imagined national community.

Institutionalized anti-semitism ensured that the struggle for emancipation gave way to the duty of assimilation. The price exacted for the Jews’ equality was the disowning of their particular identity. Once they became citizens, as Enzo Traverso has put it, Jews were no longer supposed to be Jewish.⁸¹ But the greater their success in assimilating, the more the cosmopolitan threat was borne out. In the final decades of the nineteenth century—an age of xenophobic imperialism—Jews came to be perceived as cosmopolitan, as the embodiment of an unlimited, ‘deracinated’ existence which threatens to dissolve the identity of every particular-limited ethnic community.⁸²

In this way, Jews found themselves facing a double bind. The cosmopolitan identity offered a means of disavowing the particularist ethnic identity that was condemned by the first stereotype. But the second stereotype identified cosmopolitanism as a characteristically Jewish trait, thus transforming a method of downplaying Jewish identity into its very badge. Ultimately, the only acceptable Jew was the non-Jew, but the charting of any route toward that goal could only affirm what it was attempting to deny. If a Jew maintained her traditional customs and appearance, she would be stereotyped a ghetto Jew; if she attempted to assimilate, this could be construed as a duplicitous exercise in camouflage.⁸³ She could convert to Christianity, but to switch religion in this way was regarded as capricious, opportunistic, or a sign of self-hatred. It attested to a lack of integrity, authenticity, and self-respect. Or of course she could turn to atheism, fully embracing secular modernity with its promise of the dissolution of all religious communities along with their primitive superstitions. But to do so was to commit treason against the Hungarian nation, the soul of which was Christianity, and in exposing her lack of faith, revealed also her rootless cosmopolitanism, that is, her Jewishness.

CONTRADICTIONS OF THE NON-JEWISH JEW

Budapest in Polanyi’s day was not only a hothouse of assimilation but also the destination of waves of immigration as Jews were squeezed from the Habsburg hinterlands or fled the pogroms that were unleashed in Tsarist Russia from 1881. The new arrivals from the East confronted racism of a standard format, even from their own kind. Incomers, many of whom were poor, uneducated, and from small town or rural backgrounds, could only enter the city’s labor market by the back door and faced explicit and implicit discrimination. Indigenes saw them in a socially inferior position and racialized this, essentializing the immigrant’s situational inferiority by interpreting it as the manifestation of an intrinsically inferior race or culture. The logic of racialization proceeded along socioeconomic tracks but was also politically steered. In an infernal cycle of dehumanization, the authorities in the closing decades of the nineteenth century treated Jewish refugees from the East as subhuman, for example, by transporting them in sealed railway wagons without food or water, thereby ensuring conditions of dirt and disease, on which the swirling prejudice could gleefully fasten.⁸⁴

In a sense the Eastern Jew came to figure as the Western Jew’s ugly sister, whom anti-semitic Hungary was reluctant to adopt. Assimilated Jews could respond in a number of ways. One was to extend sympathy, to humanize the Eastern Jew. The paradigm was Arnold Zweig’s Das ostjüdische Antlitz, which said, in effect, Look more closely! She’s beautiful. A minority view was revolutionary socialism, the universalism of which tended to favor assimilation but brooked no compromise with racism.⁸⁵ (The ugliness is not her, it’s anti-semitism!) But far more common than either was for assimilated cravat Jews to feel disdain toward their caftan-wearing brethren, expressing discomfiture at their distance from Western modernity or even denigrating them as Asian.⁸⁶ It was a stance that spoke of arrogance but also of self-abnegation and an internalization of an element of racism—a partial acceptance of the image of themselves reflected in harsh light by the circus mirrors of the prevailing anti-semitism.⁸⁷ (The Jew in me wouldn’t be so ugly if it were not in her too.)

The disdainful attitude was adopted by many radical intellectuals in Polanyi’s successfully assimilant milieu, egregiously so in the case of his mentor and lifelong friend, Oscar Jaszi. A convert to Calvinism, Jaszi would speak of traditionalist Jews as cowardly wearers of the yellow patch. He bemoaned the defects of the Jewish character that had been ingrained by centuries of ghetto life, and bracketed Jews together with a political current for which he reserved particular contempt, Bolshevism. Jews and communists alike, he inveighed, show the same lack of instinctive and natural promptings, the same lack of tradition, the same proud exclusiveness, the same call to deliver a Messianic message, the same impatience of other ways of thinking, the same overdevelopment of materialist hedonism in some, and absolutely oriental, life-spurning mysticism in others.⁸⁸

As Kati Vöros has shown, Jaszi played an important part in disseminating the anti-semitic fantasy that the Jewish Question was a serious concern that had to be tackled. His refraining of the ‘Jewish Question’ as a sociological problem, she writes, served as a normalizing channel for the expression of anti-Jewish content.⁸⁹

In its essentials, Polanyi shared Jaszi’s outlook. For instance, when discussing Jewish emancipation in later life, he emphasized the conservatism of Jews; their attachment to particular traditions, which distanced them from even the thought of progress, and played down their own struggle for recognition. The movement for emancipation had come not from Jews themselves but from northern European Christian society,—just as in the United States, he argued (unpersuasively), the demand for equal rights came not from black people themselves but from Northern Yankees for whom equal rights had become a question of the unity of the state.⁹⁰ Thus, the Jewish question hardly existed for the Jews even though for the Magyars it was seen as the central national problem.⁹¹ In his younger days, when an atheist (until 1917 or so) his disavowal of Judaism was one element in a sweeping, Enlightenment-inspired refusal of religion.⁹² All religions, he thundered, by infusing superstition and credulity into the magnificent facility of faith and trust, from which morality springs, [had] treacherously poisoned the sources of human prosperity.⁹³ But even then, his criticism of Judaism was particularly sharp. He regretted the Jews’ divided loyalties (to ethnos and to nation-state), and he looked down on the ghetto Jews. For him, as his daughter puts it, the model was everything English, which he identified with modernity.⁹⁴

England may have been modern, but it was also the proverbial nation of shopkeepers, and Polanyi held a marked distaste for the bargaining and profit-seeking to which such people devote themselves. Indeed, his life’s vocation was to subject the commercial ethic to moral critique and the market economy to scientific critique. Yet the ethnic cathexis for his distaste of profit-seeking was not the English but his own spurned tribe. According to his daughter, he and his entire family disliked haggling intensely. They showed a huge amount of prejudice, a real distaste, for commerce, and above all for talking about prices. What they valued were education, science, and learning. They turned up their noses at dealing with money and pursuing monetary advantage—attitudes that were identified with the aristocracy and the commercial Jewish bourgeoisie.⁹⁵

In this regard, one may reasonably ask whether Polanyi’s critique of the commercial ethic was influenced by his Jewish-bourgeois roots. The anthropologist Jonathan Parry has suggested that it is among such groups as the Jews and Jains, which have a particularly close historical association with market trade, that the ideology of the pure gift gains particular prominence, alongside its antinomy, the pure market.⁹⁶ Whereas traditional gift-exchange involved a merging of persons and things, of interest and disinterest, modern market society separates the categories, as if by electrolysis, "leaving gifts opposed to exchange, persons opposed to things and interest to disinterest.⁹⁷ Only in market society does free gift" become a pleonasm, with gift exchange defined in counterpoint to market transactions: altruistic, moral, and invested with emotion.⁹⁸

Parry’s thesis is suggestive, although it sits uneasily with the fact that the pure gift was first conceptualized by the non-Jewish (but Austro-Hungarian) anthropologist Bronisław Malinowski and was rebutted by a French Jew, Marcel Mauss.⁹⁹ An alternative conjecture would be that it was the uneven and combined experience of fin-de-siècle Austro-Hungary, with liberal economics crashing into a largely agrarian society, that nourished a style of thought underscoring the opposition of the market system to its cultural integument. Either way, in his anthropological writings Polanyi was certainly prone to proposing sharp contrasts between economic systems, such as the Melanesian kula trades taxonomized by Malinowski (which were based on reciprocity and driven by noneconomic motives of prestige, status, and kinship) and modern market society, with its accompanying assumptions (theorized by Adam Smith and Spencer) that economic mechanisms should be guided by economic motivations.¹⁰⁰

Can Polanyi’s own sociopersonal experience be detected in this formulation? His filial love notwithstanding, he elected not to follow in his father’s professional footsteps, either in its constructive (railway building) or its commercial aspect. In this he was marching in step with Lukacs, Koestler, and others in their milieu. The memoirs of many Jewish intellectuals of the era chart a break between "the anti-bourgeois youth, passionately interested in Kultur, spirituality, religion and art and their entrepreneurial parents—merchants or bankers, moderate liberals and [dutiful] patriots, indifferent to religious matters."¹⁰¹ Polanyi himself traced the rift as it ran through three distinct generations of Jewish students: those of the mid-nineteenth century retained their religious heritage; those of 1880–1900 wished only to live the bourgeois ideal; while the third, to which he belonged, stood out in in their acceptance of their relative poverty and their desire to spark social movements. His generation did not seek to create a future by looking towards their parents’ generation but in contrast to it. Thanks in part to the Galileo Circle, their speech and sense of humor contrasted with the predecessor generations; and they stood out, too, in their guiding lights: neither Zionism nor Western relativism but Russian morality (Tolstoy, Dostoyevsky).¹⁰²

In a sense, then, Polanyi’s cohort were freely deracinated Jews; they approximated to the socially free-floating intelligentsia that was to be theorized sociologically by one of their number, Karl Mannheim. They sought to make their way in the intellectual realm, but discrimination was no less rife than in in the business world of their parents. Many were condemned to marginal intellectual occupations such as freelance journalist, independent artist or researcher, private educator, and so on. Polanyi’s own cousin Ervin Szabó, for example, had to convert to Christianity to gain a position in the civil service. According to Szabó’s friend Robert Michels, it was the experience of discrimination and marginalization that accounted for the predisposition of Central European Jewish intellectuals to join revolutionary political movements. Where normal integration into the intelligentsia is blocked, a wholesale critique of society’s foundations grew in appeal.¹⁰³

Where anti-semitism was institutionalized in professional bodies, this only reinforced the conviction held by the excluded that ‘normal’ integration into the intellectual marketplace required subversion of the ground-rules.¹⁰⁴ The ineluctably contradictory elements of the condition have been summarized by Michel Löwy. Jewish intellectuals, he writes, were deeply assimilated yet marginalized; uprooted and at odds with their business and bourgeois milieu of origin; rejected by the traditional rural aristocracy yet excluded in career terms within their natural sphere of acceptance (the university).¹⁰⁵

As Jewish Hungarians, Polanyi, Lukacs, and their peers were semidetached from the Western